Methodology and Model for Analysis

Consistent
with prior years’ analysis, this updated analysis evaluates the affordability
of issuing new debt, taking into account the Commonwealth’s existing debt
service and contract assistance payment obligations. In this analysis,
affordability is measured by determining the annual amount of debt service and
other debt-like payment obligations as a percentage of budgeted revenues. This
measure (debt service as a percent of budgeted revenues) is a commonly accepted
standard for measuring debt capacity. It provides a true indication of the relative
cost of Commonwealth debt by taking into account the actual payment obligations
on Commonwealth debt and the amount of revenue available to pay those obligations
and other budgetary obligations.